Liner shipping is now earning more dollars than many of the the best known names in Big Tech.
John McCown, the founder of Blue Alpha Capital in the US, has tallied liner shipping’s combined profits for the third quarter and put them in perspective by comparing them to the stars of the internet such as Facebook, Amazon, Netflix and Google who collectively are known by the acronym FANG.
The $48.1bn in Q3 container shipping profits was almost 50% higher than total FANG profits and the 42.7% net income to revenue margin was almost three times higher. Compared to earnings of Apple and Microsoft combined, container shipping industry profits were still almost 15% higher with a profit margin that was almost 30% higher underscoring just what a terrific, record year carriers have enjoyed, with the sector on track to post combined profits in the region of up $200bn.
“The hockey stick turn in the recent results of the container shipping industry is unparalleled in its own history. Indeed it’s hard to recall any industry that has turned so sharply upward in its net financial performance,” McCown stated in a new report issued over the weekend.
South Korean line HMM reported net profits up a staggering 9239.2% in Q3 2021 at KRW2.27trn ($1.92bn), compared to KRW24.6bn a year earlier. With revenues up 133.7% to KRW4.02trn in Q3 2021, from KRW1.72trn during the same period of 2020, net margin stood at 56.5% in Q3 this year.
German line Hapag-Lloyd reported Q3 profit of EUR2.83bn ($3.24bn) compared to EUR252m in the same period in 2020. Profits for the first nine months of 2021 were EUR5.56bn, up from EUR538m a year earlier. Revenues rose in the first nine months of 2021 by around 70% to EUR15bn.
French-based CMA CGM, one of the world’s largest container lines, said net profit rose to US$5.6 billion in the third quarter from US$567 million in the same period last year, while core EBITDA (earnings before interest, taxes, depreciation & amortization) earnings rose to US$7.1 billion from US$1.7 billion.
Maersk’s in Ocean, results in Q3 were driven by high freight rates in an exceptional market situation with revenue almost doubling to USD 13.1bn from USD 7.1bn, EBITDA increased by USD 4.4bn to USD 6.3bn and EBIT improved by USD 4.4bn to USD 5.3bn.